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Should the United Kingdom leave the European Union? Your guide to understanding the Brexit

Speed News Desk | Updated on: 10 February 2017, 1:48 IST

Citizens of the United Kingdom are all geared up to vote in the European Union referendum on 23 June, to determine whether Britain should remain within the 28-member EU, or depart from it.

The United Kingdom has been a part of the European Union since 1972. Now, with the ranks divided sharply between the 'Leave' and the 'Remain' brigades, Thursday's landmark polling will answer the question that has been hotly debated in recent times - Should the United Kingdom remain a member of the European Union or leave the European Union?

While British Prime Minister David Cameron leads the 'Remain' ranks, stating grounds of economic repercussions for not breaking away, the Leave camp - headed by Conservative MP Boris Johnson - says he rejects EU control over British policy, and believes that severing ties completely - as opposed to reform - is the only way to go.

What is the Remain camp saying?

The Remain side believes that it would be economically disastrous for Britain to break away. A considerable amount of Britain's trade is with the EU and its unfettered access to the EU has propelled the London financial district to its current state of prosperity. Thus, leaving would have negative economic implications for Britain - and would result in slower economic growth, loss of jobs, rise in prices and a probable recession.

The strategy that the Remain side intends to adopt, is to try and reform the EU from within.

"Independent studies show that a vote to leave would hit the value of the pound, making imports more expensive and raising prices in the shops," Newsweek quoted Prime Minister David Cameron as saying.

If Britain votes to 'Leave', PM David Cameron will put in Article 50 in motion, which will include a two-year-long period of negotiations.

Along with Cameron, several senior cabinet ministers, the Labour party, liberal democrats, noted economists, the OECD, the IMF, most of Britain's allies and the United States and Canada are rooting for the Remain camp.

International leaders like Angela Merkel, and Barack Obama are also in favour of Britain remaining within the EU.

What is the Leave camp saying?

The Leave camp believes that unrestricted immigration from the European Union, and Eastern European nations in particular, have had a negative impact on Britain's employment and real estate markets, and therefore has to be curbed. Stressing on the importance of keeping Britain's culture and identity intact, the leave camp is essentially opposed to immigration.

The argument being put forth is that leaving the EU would give Britain control over its borders, and put an end to the red tapism that comes with being a part of the European Union.

With no immigrants working jobs in Britain, the flow of payment outside of the UK would be stopped, saving the British government billions of dollars, which can then be spent on healthcare and on other fronts within the UK.

Other than Conservative MP Boris Johnson, who is a potential prime ministerial candidate, roughly half of the Conservative caucus, several large businesses, UKIP and the Sun newspaper are backing the Leave campaign.

International leaders like Donald Trump, Nigel Farage, and Marine Le Pen are in favour of Britain exiting the European Union.

What is the popular vote?

Polling patterns within UK indicate a deep divide in the country along socio-economic lines.

While the Remain camp held a slight lead for weeks, the Leave camp gained momentum as the date of the referendum approached.

As the Britons go to polls, the race is now evenly split, with about 10% of voters still claiming to be undecided.

What do experts say?

The Telegraph quoted representatives from the UK Treasury as saying that thousands will be rendered jobless, the GDP will fall by 6% and the value of the pound will fall by 15%.

The International Monetary Fund, the OECD, the London School of Economics, eight former US Treasury secretaries, the Governor of the Bank of England, most of Britain's allies and the United States and Canada are rooting for the Remain camp.

The BBC quoted Haruhiko Kuroda, governor of the Bank of Japan, as saying that the Brexit would affect Japan's economy - as well as that of developing countries.

How does the Brexit affect India?

If the United Kingdom does choose to break away from the EU, its economic consequences could be far reaching. Brexit is expected to impact global stock markets and international economies. India-based companies and sectors that have investments and exposure to Britain will suffer as a result.

Experts are of the opinion that volatility in Indian equity markets will shoot up if Britain chooses to exit from the European Union.

"India invests more in the UK than in the rest of Europe combined, emerging as the UK's third largest FDI investor. Access to European markets is therefore a key driver for Indian companies coming to the UK," Chandrajit Banerjee, director general of Confederation of Indian Industry (CII) told the Economic Times.

India is the third largest investor in Britain and Brexit will result in volatility in the pound, directly increasing the risks for Indian businesses.

First published: 23 June 2016, 9:55 IST